Australian Dollar climbs as Iral deal hopes, weak US GDP sinks USD

• US-Iran ceasefire hopes pressure Dollar and boost risk appetite.
• Core PCE stays hot, keeping Fed hike risks alive.
• Australian household spending slump limits upside for the Aussie.

The Australian Dollar advances some 0.25% on Thursday on reports that Iran and the US reached a deal, as economic data in the US revealed that the economy grew at a slower pace than projected. At the time of writing, the AUD/USD trades at 0.7158, after bouncing off daily lows of 0.7097.

AUD/USD rebounds as risk appetite improves after Axios ceasefire report

The US Dollar is falling on Axios news that the US and Iranian negotiators have agreed to a 60-day memorandum of understanding aimed at extending the ceasefire and opening talks on Iran’s nuclear program. Nevertheless, the agreement still awaits final approval from President Trump and senior leadership on both sides.

The US Dollar Index (DXY), which tracks the Greenback's performance against its peers, is down 0.25% to 98.97 amid an improvement in risk appetite.

US inflation in April held above the 3% threshold, with the Core PCE Price Index — the Fed’s preferred inflation gauge — rising to 3.3% YoY from 3.2%, driven by elevated energy prices tied to the US-Iran war. Headline figures expanded by 3.8% YoY as expected, up from March’s 3.5%.

The US economy grew lower than expected in Q1 2026, with GDP surging just 1.6%, down from 2.0% in the second estimate, according to the US Bureau of Economic Analysis. The Labour Department also reported that Initial Jobless Claims rose to 215K in the week ending May 23, above expectations of 211K.

Fed commentary remained mixed. St. Louis Fed President Alberto Musalem warned that a rate hike could be needed if inflation fails to cool. At the same time, New York Fed President John Williams said policy is appropriately positioned given the outlook.

In Australia, household spending fell 1.1% in April, according to the Australian Bureau of Statistics (ABS), below economists' estimates of a 0.4% contraction.

Ahead, the Aussie’s schedule is absent. In the US, traders await speeches by Federal Reserve officials, ahead of entering their blackout period.

AUD/USD Price Forecast: Technical outlook

In the daily chart, AUD/USD trades at 0.7168. The pair holds a modest bullish bias as it sits above the latest simple moving average from the triple set around 0.7104 and respects the rising trend-line support zone projected near 0.7133. The Relative Strength Index (14) hovers slightly above the midline near 51, hinting at steady but not overstretched upside momentum as price consolidates around the day’s opening pivot at 0.7168.

On the downside, immediate support is seen at the intraday pivot and prior open around 0.7168, with the clustered rising trend-line breaks near 0.7133 reinforcing a broader demand band ahead of the simple moving average support by 0.7104. A deeper slide could expose the former downward trend-line break level near 0.6454 as a more distant structural floor. On the topside, bulls would need to clear successive resistance defined by the higher upward trend-line break projections at 0.7777 and 0.8182 to reclaim a more assertive medium-term uptrend.

(The technical analysis of this story was written with the help of an AI tool.)